July 21, 2009

Shelley Stark’s book is now available at Amazon.com, and other book sellers online and locally. Get your copy today! Then come in and post your comments here!

-GFS

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July 2, 2009 (10:24 p.m. PacificTime)

I have been informed by someone who was going in to the publisher’s site this evening to order multiple copies to distribute within their government office that the publisher has taken down the button allowing purchase of the complete book through the publisher this evening.

I checked and that does seem to be the case. I am afraid we may have overwhelmed them, as the book does not actually start distribution through the usual commercial book outlets until (they said at Google) August 1.

You can still get the first 25 pages or order the ebook from the publisher’s site and then order the complete hard copy later. It really is worth reading and will probably spur you on in your oversight missions or your campaign against corruption if you, like me, are a whistleblower supporter. -GFS

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July 2, 2009 early afternoon

I heard from a reader today that the book is available directly through the publisher this month (July). Google, Amazon, and Barnes and Noble apparently won’t be able to ship it until August 1, 2009.

The link to order directly now (and receive the book in 5-10 days) from Universal Publishers is:

It will make invigorating reading. Let me know what you think.

-GFS

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After five years of hard researching work, Shelly Stark’s book on the Hidden Treuhand, utilized by Halliburton and others, will be out and available for purchase in July 2009. It will be available in most places including Amazon.com I understand. I repost the article Ms. Stark published last August to give you a peek into the important content of her book.

Anyone who supports whistleblowers and supports the overall clean up of the business practices of industry including defense contractors will find this a must read!

If you can contribute to Truthout as well, your efforts will be appreciated. Truthout continually prints news that is germane to stopping the corruption that has been overtaking our country the past decade. Please help them continue publishing with your generous donation. -GFS

Halliburton takes advantage of a European loophole that lets corporations hide beneficiaries and assets.

Little is known of a customary European legal practice that offers corporations and individuals an opportunity to profit from assets while maintaining complete anonymity of the beneficiary’s identity. This practice is referred to as “Hidden Treuhand” in the English language. The practice of Hidden Treuhand submits to legal local customs in Austria, Germany, Liechtenstein, Luxemburg and Switzerland, but due to globalization, has moved beyond European borders via corporations and individuals, who put it to personal use.

The practice of Hidden Treuhand is relevant and unregulated. More and more, the relevant practice of Treuhand is used in hiding an asset owner’s identity from the outside world. Assets, whether they are corporate shares or fixed assets, can be owned in secret. The personal income derived from these assets can also be kept secret from tax authorities. An example of how Hidden Treuhand facilitates tax evasion is part of the latest scandal where thousands of Germans evaded tax through the services of the LGT Treuhand Bank in Liechtenstein, using a combination of Treuhand and foundations to hide true owner identity of bank accounts.

Hidden Treuhands in Europe impact the lives of American citizens. Hidden Treuhands enable even American corporations to hide the identity of beneficiaries, assets and income. Halliburton has a Hidden Treuhand embedded in its Austrian subsidiary. It prevents transparency regarding corporate activities.

The lack of transparency creates special advantages for some, and consequences for others such as governments, competitors, stockholders and citizens. For example, a beneficiary can evade personal income tax, because the income derived from a hidden asset is not linked to the beneficiary. There is another advantage to Hidden Treuhands that borrows from the concept of a “trust.” The “trust” concept allows for dividends to be removed. Money transferred to a subsidiary may be considered a dividend. By using a network of subsidiaries, favorable tax laws and banking secrecy, CEOs and insiders can profit without transparency. The Hidden Treuhand is an important aspect of what makes globalization so attractive to American and European corporations.

Given these attributes, it is alarming when a Hidden Treuhand is discovered in a subsidiary that is fully owned by Halliburton USA. Halliburton’s Hidden Treuhand is evident in the firm’s corporate records. Halliburton International GmbH was created in Austria in June of 1992, although another subsidiary, at the same address, was in existence in Austria since 1958. The new subsidiary, Halliburton International GmbH, has no apparent reasons for existing other than to house a Hidden Treuhand in its corporate structure, receive dividends from other subsidiaries and acquire other subsidiaries. This firm has no employees. It creates no income. Another company, Halliburton Company Austria GmbH, at the same address, could have equally performed whatever function this subsidiary has, but it has no Hidden Treuhand. The obvious conclusion is Halliburton USA needed a subsidiary with a Hidden Treuhand.

The Hidden Treuhand easily accomplishes tax evasion because dividends transferred to a subsidiary with a Hidden Treuhand can be anonymously distributed or used to purchase other holdings. For example, Halliburton International GmbH has acquired acquisitions in Russia and Kazakhstan that later disappear from the corporate records.

Halliburton attracts a certain limelight in connection with any Treuhand activities because of its link to a highly controversial war and Vice President Dick Cheney’s earlier association with Halliburton. We would have expected all ties to his former employer to be have been severed when he took office to avoid a conflict of interest. The impenetrability of the Hidden Treuhand makes it impossible to know who else is involved beyond the CEOs listed on Halliburton International GmbH historic corporate data.

Dick Cheney claims to no longer own stock in Halliburton, but he was its chairman and CEO for five years, and either hired or promoted many of the executives now running Halliburton, or formerly involved with the subsidiary with the Hidden Treuhand in Austria. It is highly unlikely the chief executive officer, Dick Cheney, would be unaware of the Austrian subsidiary’s existence, originally headed by the executive vice president and chief legal officer, Lester L. Coleman, of Halliburton International USA. But it is an absolute certainty Lester L. Coleman and all the other CEOs listed on Halliburton International GmbH corporate historic records do know of the subsidiaries existence and its Hidden Treuhand. It was the intention of these CEOs to set up a secret subsidiary in 1992 with a Hidden Treuhand embedded.

Perhaps more importantly, Halliburton’s CEOs, listed in the corporate historic records of Halliburton International GmbH in Austria, should know Hidden Treuhands could be used to undermine American security by providing a means for financing terrorists. Currently, one of the strongest arguments the US and the OECD are using against banks, lawyers and Treuhand activities in Europe to combat tax evasion and money laundering is how these activities can be used to fund terrorism. The Iraq War is one portion of the overall strategy of the ‘War on Terror’ that also includes preventing any funding for terrorism. It takes little imagination to see the huge potential Treuhands facilitate: creating a means for terrorists and criminal organizations to conceal their true identities and motives and yet work openly in the capitalist system.

Halliburton’s CEOs must be aware of the potential misuse of Hidden Treuhands, as they have not been particularly open about their own use of Hidden Treuhands to date. Halliburton simultaneously contracts to fight a “war on terror,” while utilizing the same nontransparent mechanisms concerned authorities seek to prevent access to by terrorists. Faced with a conflict of interest, Halliburton CEOs demonstrate with their silence a willingness to protect their own interests, and doing so while we are at war with an enemy that works in the shadows.

The noncompetitive contract awarded Halliburton was orchestrated by Vice President Dick Cheney and backed by the Bush administration. This contract has afforded an estimated US$1.4 trillion to US$3 trillion of US taxpayer money to flow through the coffers of Halliburton, virtually unmonitored and fraught with accounting irregularities. The receiver of much of this US taxpayer money is Halliburton USA, its affiliates and subsidiaries. One of the subsidiaries, the Austrian subsidiary, is capable of dispersing any money sent to it to unknown persons, without a hint of transparency.

The Hidden Treuhand is more than just a means of profiting without transparency; it is a national security threat, whether wielded by al-Qaeda or Halliburton. If Americans were brought into a war based on a profit motive while we were supposed to be focused on alleviating the threat of terrorism, it could amount to treason. This risk should be given some credence and investigated. For this reason, Halliburton’s corporate records were given to the US Internal Revenue Service. Maybe they will find something illegal, tax evasion for example, or maybe they will come back and say they found nothing illegal: The Hidden Treuhand is just a little bit naughty.

There is no transparency to a Hidden Treuhand, and, therefore, no means to identify the real benefactors. But the most important factor concerning a Treuhand contract is this: If a Treuhand contract is embedded in the corporate structure, then its sole purpose is to prevent the public from knowing the identity of the real stockholders. Who is calling the shots and who is benefiting is kept secret.

The “True Hands,” the true benefactors’ identity, is hidden from public knowledge; they remain anonymous and nameless in transactions, and that is the sole incentive for creating a Hidden Treuhand.

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Shelley Stark is the author of a forthcoming book, “The Hidden Treuhand: How Europe Offers US Corporations and Individuals an Opportunity to Hide Assets, Identity, and Income.”

This is unbelievable, kind of like taking a trip in “The Wayback Machine” (ala Mr. Peabody’s in Rocky and Bullwinkle) to once again see how victims of rape are treated in this country.Have the last 40 years changed nothing?Rape victims are abused further by their employers, the state department, and then by our legal system, in a big “blame the victim” session.Please go view the videos.-GFS

I recently mentioned a website written by a former electrician, “Ms. Sparky,” who worked in Iraq, turned whistleblower. Please look at her most recent post below and then use the link to visit her site to see comments and lots of other interesting information. -GFS

(WASHINGTON, D.C.) — U.S. Senator Byron Dorgan (D-ND), who chaired a Senate hearing last week on the electrocution of U.S. troops in Iraq, and four other U.S. Senators are objecting to the Pentagon’s selection of contractor KBR to inspect its own electrical work in Iraq. The hearing examined reports that at least a dozen U.S. troops were electrocuted since 2004 at U.S. military bases in Iraq where KBR holds the contract for electrical work. The Pentagon asked KBR to inspect its work for hazards following those reports.

Dorgan, Senators Bob Casey (D-PA), Maria Cantwell (D-WA), Sheldon Whitehouse (D-RI), and Amy Klobuchar (D-MN) raised their objection in a letter sent Friday to Secretary of Defense Robert Gates and General David Petraeus. The inspections should be independently conducted by someone “both well-qualified and objective,” they wrote.

Dorgan also called Friday on Secretary of Defense Robert Gates and General David Petraeus to take immediate action to suspend KBR’s contract for electrical work at U.S. military bases in Iraq and replace the company with “people who know what they are doing and whose work won’t put the lives of American soldiers at risk.” Dorgan said.

A New York Times report Friday revealed electrical problems at military bases in Iraq are much more numerous, widespread and severe than previously acknowledged. “This is a problem that requires immediate action to protect American troops,” Dorgan said. “Somebody other than KBR ought to be doing electrical work at U.S. bases in Iraq immediately. KBR’s failure is massive and American troops are dying because of it.”

On July 11, Dorgan presided at a Senate Democratic Policy Committee (DPC) hearing which examined the electrocution reports. The panel heard testimony from the mothers of two soldiers who were electrocuted and a soldier who saw other U.S. troops being shocked. It also received testimony from two KBR whistleblowers who said KBR routinely hires non-electricians – even in supervisory posts – to perform electrical work and resists fixing known hazards.

The testimony “documented KBR’s poor performance and lax standards in hiring employees to do electrical work. Given this track record, and the fact that a number of deaths have occurred at facilities maintained by the company, it makes no sense to entrust KBR with inspecting electrical safety conditions in Iraq,” the Senators wrote.

KBR would also “have strong incentive to describe its own work in the best possible light,” the Senators noted. “In fact, KBR’s spokesperson has insisted from the outset – before KBR has even completed the inspections – that there is no evidence that KBR has done anything wrong. Thus, the company seems to be prejudging the outcome of its investigation.”

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Be sure to read the letters to General David Petraeus (click HERE) and Secretary of Defense Robert Gates (click HERE)

WASHINGTON — Shoddy electrical work by private contractors on United States military bases in Iraq is widespread and dangerous, causing more deaths and injuries from fires and shocks than the Pentagon has acknowledged, according to internal Army documents.

During just one six-month period — August 2006 through January 2007 — at least 283 electrical fires destroyed or damaged American military facilities in Iraq, including the military’s largest dining hall in the country, documents obtained by The New York Times show. Two soldiers died in an electrical fire at their base near Tikrit in 2006, the records note, while another was injured while jumping from a burning guard tower in May 2007.

And while the Pentagon has previously reported that 13 Americans have been electrocuted in Iraq, many more have been injured, some seriously, by shocks, according to the documents. A log compiled earlier this year at one building complex in Baghdad disclosed that soldiers complained of receiving electrical shocks in their living quarters on an almost daily basis.

Electrical problems were the most urgent noncombat safety hazard for soldiers in Iraq, according to an Army survey issued in February 2007. It noted “a safety threat theaterwide created by the poor-quality electrical fixtures procured and installed, sometimes incorrectly, thus resulting in a significant number of fires.”

The Army report said KBR, the Houston-based company that is responsible for providing basic services for American troops in Iraq, including housing, did its own study and found a “systemic problem” with electrical work.

But the Pentagon did little to address the issue until a Green Beret, Staff Sgt. Ryan D. Maseth, was electrocuted in January while showering. His death, caused by poor electrical grounding, drew the attention of lawmakers and Pentagon leaders after his family pushed for answers. Congress and the Pentagon’s inspector general have begun investigations, and this month senior Army officials ordered electrical inspections of all buildings in Iraq maintained by KBR.

“We consider this to be a very serious issue,” Chris Isleib, a Pentagon spokesman, said Thursday in an e-mail message, while declining to comment on the findings in the Army documents.

Heather Browne, a KBR spokeswoman, would not comment about a company safety study or the reports of electrical fires or shocks, but she said KBR had found no evidence of a link between its work and the electrocutions. She added, “KBR’s commitment to the safety of all employees and those the company serves remains unwavering.”

In public statements, Pentagon officials have not addressed the scope of the hazards, instead mostly focusing on the circumstances surrounding the death of Sergeant Maseth, who lived near Pittsburgh.

But the internal documents, including dozens of memos, e-mail messages and reports from the Army, the Defense Contract Management Agency and other agencies, show that electrical problems were widely recognized as a major safety threat among Pentagon contracting experts. It is impossible to determine the exact number of the resulting deaths and injuries because no single document tallies them up. (The records were compiled for Congressional and Pentagon investigators and obtained independently by The Times.)

The 2007 safety survey was ordered by the top official in Iraq for the Defense Contract Management Agency, which oversees contractors, after the October 2006 electrical fire that killed two soldiers near Tikrit. Paul Dickinson, a Pentagon safety specialist who wrote the report, confirmed its findings, but did not elaborate.

Senior Pentagon officials appear not to have responded to the survey until this May, after Congressional investigators had begun to ask questions. Then they argued that its findings were irrelevant to Sergeant Maseth’s electrocution.

In a memo dated May 26, 2008, a top official of the Defense Contract Management Agency stated that “there is no direct or causal connection” between the problems identified in the survey and those at the Baghdad compound where Sergeant Maseth died.

But in a sworn statement, apparently prepared for an investigation of Sergeant Maseth’s death by the Army’s Criminal Investigative Division, a Pentagon contracting official described how both military and KBR officials were aware of the growing danger from poor electrical work.

In the statement, Ingrid Harrison, an official with the Pentagon’s contracting management agency, disclosed that an electrical fire caused by poor wiring in a nearby building two weeks before Sergeant Maseth’s death had endangered two other soldiers.“The soldiers were lucky because the one window that they could reach did not have bars on it, or there could have been two other fatalities,” Ms. Harrison said in the statement. She said that after Sergeant Maseth died, a more senior Pentagon contracting official in Baghdad denied knowing about the fire, but she asserted that “it was thoroughly discussed” during internal meetings.

Ms. Harrison added that KBR officials also knew of widespread electrical problems at the Radwaniya Palace Complex, near Baghdad’s airport, where Sergeant Maseth died. “KBR has been at R.P.C. for over four years and was fully aware of the safety hazards, violations and concerns regarding the soldiers’ housing,” she said in the statement. She added that the contractor “chose to ignore the known unsafe conditions.”

Ms. Harrison did not respond to a request for comment.

In another internal document written after Sergeant Maseth’s death, a senior Army officer in Baghdad warned that soldiers had to be moved immediately from several buildings because of electrical risks. In a memo asking for emergency repairs at three buildings, the official warned of a “clear and present danger,” adding, “Exposed wiring, ungrounded distribution panels and inappropriate lighting fixtures render these facilities uninhabitable and unsafe.”

The memo added that “over the course of several months, electrical fires and shorts have compounded these unsafe conditions.”

Since the United States invaded Iraq in 2003, tens of thousands of American troops have been housed in Iraqi buildings that date from the Saddam Hussein era. KBR and other contractors have been paid millions of dollars to repair and upgrade the buildings, including their electrical systems. KBR officials say they handle the maintenance for 4,000 structures and an additional 35,000 containers used as housing in the war zone.

The reports of shoddy electrical work have raised new questions about the Bush administration’s heavy reliance on contractors in Iraq, particularly because they come after other high-profile disputes involving KBR. They include accusations of overbilling, providing unsafe water to soldiers and failing to protect female employees who were sexually assaulted.

Officials say the administration contracted out so much work in Iraq that companies like KBR were simply overwhelmed by the scale of the operations. Some of the electrical work, for example, was turned over to subcontractors, some of which hired unskilled Iraqis who were paid only a few dollars a day.

Government officials responsible for contract oversight, meanwhile, were also unable to keep up, so that unsafe electrical work was not challenged by government auditors.

Several electricians who worked for KBR have said previously in interviews that they repeatedly warned KBR managers and Pentagon and military officials about unsafe electrical work. They said that supervisors had ignored their concerns or, in some cases, lacked the training to understand the problems.

The Army documents cite a number of recent safety threats. One report showed that during a four-day period in late February, soldiers at a Baghdad compound reported being shocked while taking showers in different buildings. The circumstances appear similar to those that led to Sergeant Maseth’s death.

Another entry from early March stated that an entire house used by American troops was electrically charged, making it unlivable.

Since the Pentagon reports were compiled, more episodes linked to electrical problems have occurred. In late June, for example, an electrical fire at a Marine base in Falluja destroyed 10 buildings, forcing marines there to ask for donations from home to replace their personal belongings.

On July 5, Sgt. First Class Anthony Lynn Woodham of the Arkansas National Guard died at his base in Tallil, Iraq. Initial reports blamed electrocution, but his death is being investigated because of conflicting information, according to his wife, Crystal Woodham, and a spokesman for the Arkansas National Guard. (END OF ARTICLE)

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GFS

This blog is about whistleblowers and the conditions and situations that happen in their lives to create their whistleblower status. This blog is intended to inform, share, and support whistleblowers and those who support them.